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Considering the amount of time your wallet and your iPhone spend sitting right next to each other, is it any wonder that banks and payment services are making iOS job #1 for their mobile strategies?

Big banks like Citi and Chase have capable iPhone apps for handling your money on the go, with features like photo check deposit and quick payments. There are also pure mobile payment plays like Dwolla, Venmo and PayPal with sophisticated iPhone apps to handle sending money to friends and businesses. (PayPal recently acquired Card.io which makes an API for app developers to capture credit cards via the iPhone camera, rather than with a dongle or hardware sled.)

The latest entry in the race to replace your traditional banking experience with something new and better comes from Simple, which puts a sophisticated web front end and sleek app atop a traditional debit card. Simple has just come out of beta for public account invitations, after several months of private testing. Founding CTO Alex Payne (formerly of Twitter) has also announced that hes stepping away from Simple to focus on other technology interests.

Simple aims to provide a (wait for it…) simpler take on managing your money, whether its from your computer or on the go. Its not a bank, exactly; its a customer service firm that works with wholesale banks to provide a checking account and matching Visa debit card. You use the card just like any debit card, and you can get cash (fee-free) from any ATM in the Allpoint network. Unlike Mint, it doesnt aggregate your fiscal data from lots of accounts; it shows you just the one account, but with greater detail and responsiveness.

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There are two answers: “no”, and “yes”. The “no” school of thought believe that this is not a good time to be putting your feet up, ignoring economic news, and generally trusting your strategy. That school will be characterised by investors such as “traders” and speculators. Those that need to act on information every nano-second.

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The US Commodity Futures Trading Commission, which filed a complaint against PFGBests futures brokerage Peregrine Financial Group on Tuesday, has struggled to restore customer confidence in derivatives markets as the MF Global bankruptcy proceeds.

The PFGBest case will put regulators, including PFGs front-line regulator the National Futures Association, and their proposed reforms under fresh scrutiny.

Here are some of the more notable regulatory fixes that have already been put forward:

Insurance fund for industry

Futures industry executives and the NFA have largely dismissed this idea, but after the disclosure that PFG may have misappropriated customer funds, CFTC Commissioner Bart Chilton reiterated his call for such a fund. CME Group

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The recent collapse of PFG Best is just another indication of the lack of regulation in the Commodities and Derivatives field. Whether it is market risk or accounting irregularities, the industry has been unable to protect customers from numerous debacles. Firms have closed due to an inability to understand the risk of positions and more recently from outright accounting fraud. It is time to protect customers by changing fundamental methodologies of measuring risk and auditing firms.

Between PFG Best and MF Global, and back to the days of Refco, it is quite apparent that the CFTC, the NFA and the Exchanges are not up to the task of analyzing the financials of the trading members. Budgets must be increased and top accountants must be paid to ensure the integrity of the firms. The staffs of the CFTC and NFA are clearly ill-equipped to make the appropriate decisions as to the financial wherewithal of the firms that they are entrusted with analyzing. Independent accountants, trained and specializing in this type of analysis would be much more successful than the groups that are currently required to perform this work. Congress already has the CFTC working on a comparatively limited budget; before any further debacles occur it is necessary to change methodologies.

In addition to accounting problems, the issue of risk management must be addressed. Currently the CFTC and the Exchanges allow customer funds to be used in the event of liquidation. This permits ones personal account to be used in the event that a firm goes under and the Clearing Member is unable cover the losses of the Customer Accounts. In the case of Amaranth, which lost in excess of $6 billion, the other customers were exceedingly fortunate that Amaranth was able to cover their losses before they liquidated their fund. The loss was larger than the adjusted net capital of the Clearing Member and the Guaranty Fund of the New York Mercantile Exchange. While the Exchanges and the Clearing Members are responsible for managing the risk of their Clearing Members and large traders, an outside Risk Review might assist in better protecting industry customers as a whole. Whether it is bad settlements, margining errors, positions with too much leverage or options positions which cannot be managed, all of the customers are at risk due to the trading behavior of their fellow customers. Independent Risk Analysis would have certainly improved the situation in the Amaranth case. In addition, losses experienced in the softs, fibers and oil could have benefited from Independent Risk Analysis. The CFTC is not equipped to appropriately analyze the risk of the Exchanges and firms they are responsible for and the entire commodities trading community is justifiably concerned whether their Clearing Member, with their money on deposit, is at risk.

Whether it is an accounting irregularity or the inability to adequately determine the market risk at a Clearing Member or Introducing Broker, the numerous issues that have plagued the commodities industry must be addressed. The simple reorganization of staff is inadequate. A completely new approach to oversight is needed. While Clearing Fees may need to be increased, a combination of outside accountants and risk managers would add a much needed safety net for an industry screaming for protection.

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When most people hear about fraudulent investment advice, they think of Bernie Madoff and other scam artists who take your money and spend it on themselves. This type of blatant fraud is surprisingly common. This week, the SEC announced that it had obtained a court order freezing the assets of a Georgia-based investment adviser who had apparently gone into hiding after orchestrating a $40 million investment fraud. The adviser, Aubrey Lee Price, allegedly concealed investment losses by creating bogus account statements with false account balances and returns.

Most investors dont have to worry about that kind of fraud. In this post-Madoff era, investors are more cautious about promises that seem too good to be true. However, there is far more pervasive conduct that takes place daily in almost every brokerage firm in this country, which can have devastating consequences to investors. In my view, it is a variant of fraud that few investors understand.

A fraudulent misrepresentation is legally defined as a false statement where (1) the party making the statement is aware that it is false or disregards the possibility of it being false, (2) the party making the statement does so to induce another party to enter into a contract, and (3) the other party enters the contract as a result of the statement and consequently suffers a loss.

Lets apply this definition to the advice given by most brokers and advisers to both individuals and to plan sponsors of 401(k) plans who are required to decide what investment options to include in their plans. Typically, the advice is to buy actively managed funds (where the fund manager attempts to beat a designated benchmark, like the Samp;P 500 index). Its highly unlikely that your broker has ever told you to limit your investments to a globally diversified mix of low management fee stock and bond index funds.

Brokers will frequently support their recommendation of actively managed funds with data showing excellent past performance or a Morningstar 5-star rating. The message is clear: He is recommending these funds because he believes they are likely to outperform their benchmark.

However, as I explained in a recent blog, there is compelling evidence that 97 percent of actively-managed funds could not be expected to beat a risk-adjusted benchmark. There is no credible, peer-reviewed data indicating your broker or anyone else can identify who the members of this elite club of outperforming fund managers will be in the future.

Most investors are not aware of this data. If they were, there would reject recommendations for actively managed funds and invest only in index funds.

Is the conduct of brokers who recommend actively managed funds fraudulent? Lets go back to the definition of a fraudulent misrepresentation. A statement that you should buy an actively managed fund because it is likely to beat its benchmark over the long term clearly is a false statement. The broker who makes this statement either knows it is false or ignores the possibility of it being false. He makes this statement to induce you to buy an actively managed mutual fund. You rely on his statement and buy the actively managed fund. You are likely to incur a loss compared to the returns of a low management fee index fund of comparable risk. You decide.

To me, if it looks like a duck and quacks, its a duck.

Dan Solin is a senior vice president of Index Funds Advisors. He is the New York Times bestselling author of The Smartest Investment Book Youll Ever Read, The Smartest 401(k) Book Youll Ever Read, The Smartest Retirement Book Youll Ever Read, and The Smartest Portfolio Youll Ever Own. His new book, The Smartest Money Book Youll Ever Read, was published on December 27, 2011.

The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

Posted in Your Money | Comments Off on Rethink the Advice From Your Broker

(did you know Occupy Fresno is the longest running Occupy that is still at their original park/space ? in the home of the Freepers)

If you understand how the 99% has been robbed, abused, and abandoned by the 1%, come to the press conference Friday, July 13 at St. Anthony Claret Catholic Church, 2494 S Chestnut Ave, Fresno, CA 93725 (2 blocks south of Church St.) in southeast Fresno.

Please come at 11:30. In order to make the visual statement planned by the organizers you will need to get a card with a number and be in place when the media arrives. If you cant come at 11:30 come when you can. The press conference will start at noon and will end at 12:30.

There should be excellent media coverage of the event because of the signing of the California Homeowner Bill of Rights by Governor Jerry Brown yesterday http://gov.ca.gov/home.php. (Cut and paste this link.) The timing is perfect.

The press conference will educate the community about the impact of bank corruption on residents of Fresno and on the power of moving our money out of the too big to fail banks – Bank of America, Wells Fargo, Citigroup, JP Morgan/ Chase and Goldman Sachs  and into local banks or credit unions.

The organizer is Faith In Community  PICO. Occupy Fresno, Peace Fresno and WILPFs Raging Grannies are supporters.

Please make this a priority if you can possibly attend.

Faith In Community has been planning this event for quite a while and they are very well prepared.

If you have moved your money out of one of the big banks in the last year or commit to doing so before August 13, please be sure to let Pastor Steve Ratzlaff (ffalztar@sbcglobal.net, 559-307-1555) or me know today so we can add your name to the visual planned for Fridays event. The organizers will list the first name and last initial of each money mover on a green card to be displayed at the press conference. You need not be present to be counted! A card with your name will be held by someone in attendance.

(Repeats story filed overnight; adds video link. The writer is
a Reuters contributor.)
By Lou Carlozo
CHICAGO, June 29 (Reuters) – You dont have to be Larry
Ellison to own an island.
You may not have the $500 million to $600 million it
probably cost…

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Independence Day has come and gone, so 2012 is half over. Its time to do a mid-year review of your retirement portfolio. Most of us tend to set our 401(k) and other retirement savings accounts on autopilot and forget about them. But its essential to check up on our retirement investments at least a couple of times per year to make sure they are on track. Here are five key components to examine:

Contributions. The maximum allowable 401(k) contribution is $17,000 in 2012. If you are age 50 or older, you can contribute an extra $5,500. It is best to contribute throughout the year to take advantage of dollar-cost averaging, so each month you can contribute around $1,400. However, most plans dont let you select a specific contribution amount, but a percentage of your salary instead. Mid-year is the perfect time to check up on the amount of your contribution and see if you are on track to hit $17,000. If you are behind, then consider increasing the salary deduction percentage to maximize the tax advantage of the retirement account. If you are an employee who received a bonus or a big raise early in the year and that extra money is added to the deduction, then you could be on track to max out early. You should take this into account and perhaps reduce the deduction percentage.

Dividends. Check your retirement accounts for dividend payments. Most mutual funds and ETFs pay a dividend once a year in December, but some funds pay out in June or other months. The interest rate on money market accounts is basically zero these days, so the dividend payment wont earn you much money there. But its good to be aware of your money market accounts balance so you can take advantage of the next dip and be ready to reinvest the dividend income.

Net worth. The stock market has been quite volatile in the first half of 2012. Hopefully it didnt impact your net worth much and youre still on track for retirement. If you are near retirement and see a big fluctuation in your net worth this year, then perhaps you have too much invested in the stock market and may need to rebalance to get ready for retirement.

Spending. Most of us spend a lot of money on gifts in December and then resolve to reduce spending after the holidays. This usually works well for a few months, but by summertime our spending usually creeps up again. Mid-year is a good time to check if you are sticking to your budget. If you are spending too much money and are not maxed out on your 401(k) contributions yet, then consider increasing the salary deduction percentage. Youll get used to a little less cash in the bank and hopefully spend less money accordingly.

Resolutions. See how you are doing with your New Years goals and resolutions. You did write them down, didnt you? Thats one of the keys to completing those resolutions. If there are things youre behind on, you can refocus and concentrate on finishing them off. Two of my goals are to eat healthy and exercise more, and both have been on the slide over the last couple of months. Checking up on these goals reminded me to refocus and get back on track.

Although the year is half over, its not too late to make mid-year adjustments. These things only take a little time, and your future self will be glad you didnt ignore them.

Joe Udo is planning an exit strategy from his corporate job by reducing expenses and increasing passive income. He blogs about his journey to early retirement at Retire by 40.

The Apple Magic Trackpad requires its own power source in the form of two AA batteries, which some unaccustomed to using batteries to power any of their computer devices may be put off by at first, but which also prevents the Trackpad from being a drain on laptop batteries.

Another advantage for laptop users is that the Trackpad offers a larger functional surface area than the conventional, built-in laptop trackpad. This benefit, however, may prove a burden in some situations wherein space is limited or most computing is done off of a flat surface, such as during light-raiI commutes. The Magic Trackpad is compatible with Apple’s wireless keyboard and has conveniently been engineered to have the same height as this keyboard.

The Trackpad allows users to quickly switch between applications, and swiping through webpages online can be done very efficiently with the peripheral. The physical structure is sturdy and presents an appearance of quality construction with its wear-resistant and touch-friendly gass surface. Unlike a mouse or built-in laptop trackpad, the Apple Magic Trackpad may be independently switched off and is able to detect and respond to periods of inactivity. These features help to prolong battery life and thus allow users to continue gesturing for long periods. Since many have found that they have no need for a subset of the multitude of gestures the Trackpad can interpret, the feature of being able to shut off responses to individual gestures at will makes for a highly-customizable experience and mitigates the risk of accidental triggering of unwanted responses.